What Is Sino-Ocean Group Holding Limited's (HKG:3377) Share Price Doing?

Sino-Ocean Group Holding Limited (HKG:3377), is not the largest company out there, but it saw significant share price movement during recent months on the SEHK, rising to highs of HK$2.01 and falling to the lows of HK$1.48. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Sino-Ocean Group Holding's current trading price of HK$1.62 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Sino-Ocean Group Holding’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Sino-Ocean Group Holding

What's the opportunity in Sino-Ocean Group Holding?

According to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Sino-Ocean Group Holding’s ratio of 5.23x is trading slightly below its industry peers’ ratio of 8.77x, which means if you buy Sino-Ocean Group Holding today, you’d be paying a reasonable price for it. And if you believe that Sino-Ocean Group Holding should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. Is there another opportunity to buy low in the future? Since Sino-Ocean Group Holding’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Sino-Ocean Group Holding look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Sino-Ocean Group Holding's earnings over the next few years are expected to increase by 75%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in 3377’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at 3377? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on 3377, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for 3377, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Sino-Ocean Group Holding, you'd also look into what risks it is currently facing. When we did our research, we found 3 warning signs for Sino-Ocean Group Holding (1 shouldn't be ignored!) that we believe deserve your full attention.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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